When Flow Alkaline Spring Water was looking to launch its next big idea in bottled water – a functional water infused with CBD (cannabidiol) and other botanical ingredients – it went to directly to the source: its four million US customers that the Canadian company amassed in just under two years.
Founder and CEO Nicholas Reichenbach told FoodNavigator-USA that the company’s consumer research gave Flow the blueprint to develop Flow Glow, a functional beverage line infused with CBD (in select markets) and botanical and other antioxidant ingredients including grape seed and grape skin extracts.
“We realized that the no. 1 and no. 2 ingredients that our customer wanted to infuse inside our naturally occurring alkaline water were CBD and beauty related ingredients that have clinically [researched] antioxidant behavior,” Reichenbach said.
While an exact date launch date has not been determined, CBD-infused Flow Glow will be hitting the market in early 2019. The company is also launching extensions of its Flow Alkaline Water flavor offerings (grapefruit + elderflower and blackberry + hibiscus varieties) in January 2019 at over 10,000 US locations.
‘Not just a CBD product’
The obvious hurdle for Flow Water is that CBD is not permissible as a food or beverage ingredient in US, according to the FDA, and Reichenbach added that the CBD-infused Flow Glow product line will only be sold in “the states or countries where CBD is legal.”
Reichenbach is encouraged by recent provisions in the Farm Bill, which remove industrial hemp from Schedule I of the Controlled Substances Act and amend the definition of ‘marihuana’, thereby removing hemp and all parts of the plant and all derivatives from that definition, effectively removing Drug Enforcement Agency (DEA) authority regarding hemp cultivation, production, or commercial activity for products that contain hemp or constituents of hemp.
“Obviously, the details of that legislation are TBD, but it’s all pointing to a very synchronized bipartisan approval on launching industrial hemp [in food and beverage],” he said.
Flow Glow R&D currently is being done in partnership with an industrial hemp supplier in Colorado.
“Flow has always been a functional beverage,” Reichenbach said. ”Flow Glow is not just about a CBD product, it’s about other functional ingredients to help our consumers to feel and be the best they can be.”
A core part of that is the type of water the company uses, which comes from Blue Lake Spring in Ontario, Canada, (owned by Reichenbach’s family), where the spring water naturally filters through sand and silt which gives the water a high load of essential minerals [potassium, magnesium, calcium, bicarbonate] as well as a pH of 8.1.
Our growth story really is in the US
Flow Water launched in Canada in 2015 where it currently has a consumer base of around 1 million, and entered the US market in 2016 where its growing its business 5X compared to 3X in Canada.
“Our growth story really is in the US,” Reichenbach said, adding that a growing number of its consumers are not only exhibiting repeat purchases but buying in bulk online through Amazon.
“Our core customer and where we’re disrupting the most is our partnership with Amazon,” he noted.
Flow Water teamed up with Amazon shortly after the Whole Foods acquisition and formed what Reichenbach described as a “very strategic partnership” and grew its subscriber base by 100% month-over-month last year.
“We have about 3,000 subscribers for Flow and it’s growing at about 20% month over month. We’re expected to do over 10,000 subscribers to Flow, that’s what I would call our ‘hard core user’,” he said.
The company’s highest selling SKU is its 1-liter six pack among its online customer base, according to Reichenbach.
“They’re pantry loading for their daily hydration needs. Our average purchaser is around six liters a week,” he said.
Reichenbach claimed that self-sustaining, self-replenishing by rain, water source is more than able to keep up with demand. Blue Laker Springs releases around 1 million liters of water per day and the company is no where near approaching that level of abstraction.
“We manage the source like it’s the eighth wonder of the world,” he said.
Flow Water was designated as a Certified B Corporation in 2017 and as such has to meet a series of rigorous requirements around sustainability and transparency.